Organic SEO Blog

Saturday, July 31, 2010

Google recently revamped its image search engine to make finding the images you're looking for quicker and easier than ever. The redesigned interface lets you scroll through 1,000 images at once (with larger image previews), and eliminates text on the image search results so you can just focus on the visuals.

Previously when you did an image search, you'd see multiple pages of thumbnails with text showing the file name, dimensions, and a description associated with the image. Now you'll only see a mosaic of tightly packed image results with larger thumbnails and no text. Hovering over an image result will blow up the image, reveal the hidden metadata (for some images), and show a link to search for similar images.

Although you're viewing far more images on one page, it's actually easier and faster to look through them all because of Google's "Instant scrolling" function. Scrolling through a full set of results didn't stall or slow down my pages as the images loaded. You'll still see small page numbers to the left of the results interface to help you keep track of where you are. Google's also transitioning to image ads rather than strictly text ads. You'll find them at the top of the page.

When you click on an image result, instead of viewing the originating Web page with a frame at the top, you'll see a blown up image in the forefront of the screen with the Web page dimmed in the background. To the right of the page you'll see the URL of the Web page and a link to the full-sized image. In addition to the images dimensions next to the link for the full-sized image is text telling you how much bigger the full-size image is than blown up image shown on the page.

Clicking the "X" on the blown up image will take you directly to the originating Web page. I like this layout better than the framed page used by the older Google images format, because you get a much better idea for the size of the image (plus, you may not want to click on the full-image link). It would also be nice if clicking the image would take you to the image's position on the originating page—neither the old or new versions of Google Image Search has this ability.

Google managed to display more and larger image results without slowing load times, and made it faster to find images for which you're searching. The redesign is being slowly rolled out to all users by the end of the week, and currently only works on PCs running Chrome, Safari, Firefox 3.0 (and up), and Internet Explorer 7 and 8. Overall, the new Google Image search is a much more efficient, aesthetically pleasing way to view image search results.

Net income for the three months ended June more than doubled to 837.4 million yuan ($123.6 million), or 2.40 yuan per American depositary receipt, Baidu said today in a statement. That exceeded the 710.4 million yuan average of 14 analysts’ estimates compiled by Bloomberg. In the year-earlier period, Baidu’s profit was 383.3 million yuan, or 1.10 yuan per ADR.

Baidu gained advertisers from Google after the U.S. company shut its China-based search site in March and redirected local users offshore to avoid censorship rules in the world’s biggest online market. The Beijing-based company’s stock has climbed 78 percent in U.S. trading this year, making it the best performer in the Morgan Stanley Internet Index.

“We believe the market-share gain for Baidu versus the market-share loss for Google is likely related to Google China’s partial exit,” Citigroup Inc. analyst Alicia Yap wrote in a July 19 report. The changes in Google’s China site “caused increasingly bad user experiences,” according to Yap.

Outperforming Rivals

Baidu’s ADRs fell less than 1 percent in Nasdaq Stock Market trading today before the earnings announcement. The stock has outperformed online rivals in China this year including Tencent Holdings Ltd., the country’s biggest Internet company by market value, and Alibaba.com Ltd., the leading local e-commerce operator.

Sales during the three-month period were 1.9 billion yuan, compared with 1.1 billion yuan a year earlier. Revenue is expected to rise to as much as 2.26 billion yuan in the third quarter, Baidu said. This compares with the 2.18 billion yuan average of analysts’ estimates compiled by Bloomberg.

The adoption of Baidu’s Phoenix Nest advertising system also boosted the company’s sales, according to Citigroup’s Yap. In December, Baidu introduced the program, which is designed to facilitate the sales of online-search keywords to clients.

Baidu accounted for 70.8 percent of China’s search-engine market by revenue in the second-quarter, rising from 67.8 percent three months earlier, according to research company iResearch. Google’s market share dropped to 27.3 percent from 29.5 percent.

In March, Google defied the Chinese government by ending self-censorship of its local search service and redirecting users to an unfiltered Hong Kong site. The U.S. company won the renewal of its Internet license in China this month after submitting a revised application on the grounds that it would now point users to the Hong Kong site, instead of redirecting them automatically.

China had an estimated 420 million Internet users at the end of June, an increase of 36 million from six months earlier, according to data from the government-sponsored China Internet Network Information Center.

Wednesday, July 28, 2010

If there was any doubt that Yahoo Japan is separate from Yahoo in the United States, let this dispel it: Yahoo Japan has signed a deal to use Google's search engine rather than Microsoft's.

The deal, reported Monday by All Things Digital, was confirmed later that day with a Google Japan blog post.

In the post, Daniel Alegre, vice president of Google's Asia Pacific and Japan operations, said Yahoo Japan will use Google search results and Google's technology for supplying the accompanying search ads. With such partnerships, revenue from the search ads is shared between the Web site and the company that supplies the ads, in this case Yahoo Japan and Google, respectively.

The deal is a blow to Microsoft, which has been working for years to match not just the utility of Google's market-leading search service, but also its scale. Yahoo plugged in Microsoft's Bing search engine to supply search results, but evidently Microsoft couldn't convince Yahoo Japan to follow suit in that prime market.

Yahoo is an investor in Yahoo Japan, but it's not the only one--Softbank holds a bigger share--so Yahoo Japan's decisions don't necessarily align with that of Yahoo.

In response to news of the deal, Microsoft cried foul and cited a failed Yahoo-Google tie-up in North America. In a statement, Brad Smith, Microsoft's general counsel, said:

This agreement is even more anticompetitive than Google's deal with Yahoo in the United States and Canada that the Department of Justice found to be illegal. The 2008 deal would have locked up 90 percent of paid search advertising. This deal gives Google virtually 100 percent of all search enging optimization services in Japan, both paid and unpaid. It means there will be no search competition in Japan and that Google will end up controlling all personal search information for all Japanese consumers and businesses.

Tuesday, July 27, 2010

Speaking exclusively to The Telegraph, Dennis Crowley, Foursquare’s co-founder, said that his company was in talks with “everyone” in the search space – including all three major players: Google, Yahoo!, and Microsoft about a data partnership.

“We can anonymise data and use it to show venues which are trending at that moment. Twitter helped the world and the search engines know what people are talking about. Foursquare would allow people to search for the types of place people are going to – and where is trending – not what.”

All three search engines failed to deny the talks were happening, but refused to comment or divulge any more detail when approached for statements.

Twitter’s first commercial deals were with each of the three major search engines, licensing its real-time feed of information and allowing the engines to index every tweet helping the search experience to become more ‘real-time’.

Crowley did not give a timeframe as to when the search deals could be signed off, but said it was an exciting time and the company was talking to “a lot of different potential partners” which were interested in Foursquare’s data.

Crowley is no stranger to Google’s executive team, having sold Dodgeball, the first text message-based version of Foursquare, to the search giant in 2005. It was later shut down by Google in 2009. He told The Telegraph that he remains close with “the guys at Google”, even employing a few “former Googlers”.

Foursquare has been pitted against Gowalla, a separate social network based on geo-tagging, which launched at same time during May 2009. When asked if there was any chance of Foursquare ever joining forces with Gowalla to grow its impact, Crowley replied diplomatically: “We are more social than Gowalla and ultimately have different visions moving forward. They are excited about different things.”

The location-based social network signed up it two millionth member last week, three months after acquiring its first million users. Foursquare is now valued at $95 million, post a recent $20 million cash investment led the major Silicon Valley venture capital company, Andreessen Horowitz. The VC is headed up by high profile technology investors Marc Andreessen (co-founder of Ning, Twitter investor and Facebook board member) and Ben Horowitz (Fluther investor and a former HP vice president).

Monday, July 26, 2010

Companies are doing a poor job of using social networks, such as Facebook and Twitter, to engage their customers and employees. In fact, 70 percent of consumers want to interact with businesses via social media, but only 30 percent of companies are equipped to handle it. The grim news comes from a study by research firm Yankee Group, commissioned by Siemens Enterprise Communications.

Most customers and employees would rather use social media for business communications, but one-third of enterprises either lack formal social networking polices, don't allow their employees to use social networks at work, or are unaware of their company's participation in social media, the study showed.

By failing at integrating social networks, including corporate blogs, into regular business communications, enterprises are missing a golden opportunity to engage their customers and enhance worker productivity.

"Social media is changing the way businesses, customers and employees interact, and this creates significant opportunities for contact centers and the enterprise as a whole to leverage the integration of these tools into business processes," said Yankee group research Zeus Kerravala, in a statement.

Other study findings show the importance of a strong social media presence for business:

• Fifty percent of survey respondents use social networks daily, or several times a day.

• Social media boosts devotion: Almost 60 percent of customers say that business outreach via social networks would improve their loyalty to a company.

• Employees love social media. Nearly 70 percent of workers want better tools to manage social networks for business. Example: They want the ability to launch a Web conference and invite people from their social and work networks.

The Siemens news release for the study included a pitch for its OpenScape software tools, which help enterprises unify their communications services with social networks. The self-serving nature of the announcement ("Your social media strategy stinks, so buy our software") might lead some to question the veracity of the study's conclusions.

However, the Yankee Group's findings corroborate earlier studies that essentially say the same thing: Most businesses are too disconnected from social media for their own good.

A poor or nonexistent social media presence gives customers and employees the impression that your business is out of touch or disinterested in open communication--a strategy that could drive business elsewhere in the long run.

Sunday, July 25, 2010

Alice and Donald Murray of Bangor, Pa., use social media, such as Facebook, left, to promote their ribbon business, Over the Moon Ribbons.

SAN FRANCISCO — A surge in social-media use by small businesses reflects a shift in how they operate and their comfort with increasingly easy-to-use technology.

In growing numbers, small-business owners are adopting social-networking services, location-based services, Twitter and online video to promote products and services, according to a new study by MerchantCircle, a social network for small businesses. It polled a fraction of its more than 1.3 million members.

The survey results are the strongest evidence yet that small businesses — which account for more than 90% of all U.S. companies and fuel the economy — are accelerating their use of social media at the expense of traditional media such as newspapers, the Yellow Pages and radio. Even e-mail messages have taken a beating.

Businesses with fewer than five employees "see Facebook and others as a way to reach targeted consumers" while saving marketing expenditures during a rough economy, says Darren Waddell, vice president of marketing at MerchantCircle.

For the first time, social media has become the most visible way for small businesses to promote their products and services. More than half of nearly 10,000 respondents nationwide say they plan to create or maintain a social-networking presence in the next three months, compared with 41% in the first three months of this year.

That is the highest figure since the survey started a year ago.

At the same time, adoption of location-based services has grown rapidly — 32% of merchants familiar with Foursquare use it, compared with 25% in March. Twitter is gaining favor, too: 8% more merchants intend to use it now than in the first three months of the year. The University of Maryland's Smith School of Business says social technology adoption rates in the U.S. doubled in the past year, to 24% from 12%.

Still, business' embrace of social media does not necessarily translate into profits, says HipChat, a group chat and messaging service for companies. More than 90% of the 2,000 small businesses it works with use social media, but few have seen a business benefit. A Compete Online Shopper Intelligence study suggests some consumers are slow to accept social media as a shopping resource.

Yet tens of thousands of small businesses advertise on Facebook, up three times from a year ago. More than 1 million small businesses have Facebook profiles reaching hundreds of millions of customers. Many small-business owners used Facebook for personal use before they started their companies, according to Facebook.

"People are familiar and comfortable with Facebook," says Tim Kendall, director of monetization at Facebook. "Regardless of your business, many of your customers probably are already on Facebook."

"We're seeing a (recent surge) in the use of Facebook by local businesses," Kendall says.

Social media's allure

Small-business owners are gravitating to social networks in large part because technology has evolved to the point where anyone — no matter what age or tech background — can turn their personal passion into a thriving online business.

Alice and Donald Murray acquired Over the Moon Ribbons, a maker of discount ribbons, in 2004 after Alice retired. The tech newbies, who have been married for 49 years, initially sold ribbons at flea markets before their daughter Sharyn persuaded them to sell online.

They began using Facebook, Twitter and software from e-commerce company BigCommerce this year. In six months, they've grown the business to more than $1,000 a month. The software they use makes it easy to design and run an e-commerce site, with built-in search engine optimization services and marketing functionality. The program will soon let small merchants integrate Facebook "Like" buttons and other functions. "The online stuff has a far reach without losing the personal touch," Alice Murray says. "We do a lot of communication, still, on regular e-mail."

Online sales at Southern Jewlz have doubled in six months since recent college grad Randa Yezak, 23, started using Twitter and e-commerce software. Her 2-year-old business also has 8,000 fans on Facebook.

"The value of Facebook is that it gives you efficient ways to retain current customers and reach out to and find new customers," Kendall says. "It is happening on a scalable, digital way among you and your friends."

U.S. consumers and businesses may get more options in wireless service starting next year, with the launch of a new wireless broadband network that aims to provide competition to the incumbent phone companies.

Private-equity firm Harbinger Capital Partners on Tuesday revealed details of the launch of its wireless network, LightSquared, which should cover 92 percent of the population by 2015.

But there are financial and regulatory hurdles to overcome. And in another wrinkle, LightSquared won't initially be offering conventional cell phone service, just data. It's possible to send phone calls over data connections, but that technology is not fully mature or standardized.

Still, LightSquared represents a rare new entrant in the wireless market. Only two other companies, Verizon Wireless and AT&T Inc., have firm plans to build nationwide networks using the same, fourth-generation network technology that LightSquared will use. Sprint Nextel Corp., through its Clearwire Corp. subsidiary, is building a third one with a different 4G technology that's likely to get less support from equipment makers.

Consumers won't buy service directly from LightSquared. Instead, it will sell access wholesale to other companies that can resell it to consumers. LightSquared hopes to attract cable TV providers, phone companies that don't have wireless networks of their own and retailers that want to provide wireless service under their own brand.

Dan Hays, who focuses on telecommunications with consulting firm PRTM, said LightSquared "could provide a renewed opportunity for retailers and major brands such as Wal-Mart, Best Buy, and Office Depot to enter the wireless market as service providers to consumers."

LightSquared plans to start providing service in the second half of 2011 in Las Vegas, Phoenix, Denver and Baltimore.

LightSquared said Nokia Siemens Networks will build, maintain and operate the network under a $7 billion, eight-year contract. Nokia Siemens is a joint venture of Finland's Nokia Corp. and Siemens AG of Germany.

The contract is an important step for Nokia Siemens, which hasn't had much of a presence in the U.S. market for wireless equipment. On Monday, it announced a deal to buy Motorola Inc.'s networks business for $1.2 billion, with a view to increasing its foothold in the U.S.

One reason it's rare for new national wireless carriers to spring up is that it's difficult and expensive to procure the rights to airwaves across the nation. Verizon Wireless paid $9.4 billion for nationwide spectrum rights in a 2008 auction, for example.

LightSquared is in an unusual position in that it owns nationwide wireless spectrum once set aside for satellite phone use. Harbinger bought SkyTerra, a satellite company, earlier this year.

Placing calls over satellites is expensive and impractical compared with using cell towers, so the FCC allows spectrum holders to back up satellite coverage with towers. That gives LightSquared a "back door" to building out a conventional ground-based network of cell towers.

However, under current FCC rules, all devices that use LightSquared's spectrum have to come with the ability to connect to a satellite besides conventional cell towers, according to satellite industry consultant Tim Farrar. That would add to the cost of devices and limit the selection.

LightSquared is banking on the FCC changing its rules to allow devices that only talk to towers. Regardless, it needs to launch a satellite later this year to satisfy the FCC's condition that it be able to provide satellite connectivity.

The launch of the new network would fit into the FCC's goals of creating more competition in the wireless market. FCC Chairman Julius Genachowski said Tuesday that he was pleased to learn of the creation of LightSquared.

Farrar said it's also not clear if Harbinger will be able to raise the billions needed to build out the network, and other expenses.

"It's going to be very interesting to see where this money comes from," Farrar said.

Tom Surface, a spokesman for LightSquared, said the company "will evaluate our funding needs as we develop and grow our business."

LightSquared's CEO is Sanjiv Ahuja, who was CEO of French cell phone company Orange from 2004 through 2007. He then founded a company that started wireless service in Pakistan and Bangladesh.

Saturday, July 24, 2010

Twitter Chief Executive Evan Williams celebrated the dramatic growth of the microblogging service he co-founded at a dinner event Friday with 500 Japanese fans and promised to learn from them.

"We've come a long way in two years especially in Japan," he told a cheering crowd at a Tokyo hall.

Twitter has been a huge hit in Japan. As Williams noted in his presentation, Japanese tweeters set a world record when the whistle blew in the World Cup game in which Japan beat Denmark at 3,283 tweets per second, mostly believed to have been Japanese.

Williams - appearing in a T-shirt with the Twitter trademark bird set in a red circle, the symbol of the Japanese flag - said when Twitter held a similar event in 2008, only 40 people came.

He mingled with tweeters to find out how they were using the technology, in what he said was an effort to make the service better for his important market.

He thanked the crowd in Japanese and offered a celebratory toast with beer, as the crowd cheered.

Noriaki Takayama, who translates imported software and has 2,500 followers on Twitter, said he has made dozens of friends through Twitter.

"It's a great way to expand your network, and one connection leads to another," he said.

Not only have Japanese like Takayama embraced Twitter, but they are also tweeting with a vehemence unparalleled in other parts of the world, including the United States. San Francisco-based Twitter Inc. estimates Japanese send nearly 8 million tweets a day, about 12 percent of the global total.

Joseph Tame, a 32-year-old Briton, said he no longer feels lonely living in Japan, thanks to Twitter. He says Twitter was instrumental in attracting 13,000 viewers to his live video broadcasting of his run in the Tokyo Marathon.

Microsoft Corp., the world’s largest software maker, may raise its quarterly dividend for the first time since 2008 as its cash hoard swells, data compiled by Bloomberg suggests.

This quarter, Microsoft may boost the dividend to 15 cents a share from 13 cents, giving the company an indicated dividend yield of 2.31 percent, according to the data. That increase would cost the software maker about $700 million a year.

Microsoft, which will probably post its biggest sales gain in two years when it reports fourth-quarter earnings today, had $39.7 billion in cash and short-term investments as of March 31. The company is looking for ways to reward shareholders after a 21 percent slide in the stock price last quarter, compared with the 12 percent drop in the Standard & Poor’s 500 Index.

“They really have to do something,” said Michael Holland, who oversees more than $4 billion, including Microsoft shares, as chairman of Holland & Co. in New York. “A dividend increase is a way for the board and management to signal their overall business is healthy.” Not doing it “would probably send an unintended signal,” he said.

Bloomberg bases its dividend estimates on seven criteria, including a company’s dividend history and public forecasts.

Same Strategy

Microsoft Chief Financial Officer Peter Klein said in January that he would hew closely to the strategy of his predecessor, Chris Liddell, who stepped down as CFO last year. The approach included holding a “target amount of cash” and using all operating cash left after capital expenditures and acquisitions for dividends and share repurchases, Klein said.

Microsoft spokesman Pete Wootton declined to comment.

Heather Bellini, an analyst at ISI Group in New York, concurs that Microsoft is likely to increase its dividend. Microsoft has typically focused on growth in operating profit to determine when to raise the dividend, she said in an e-mail.

“For fiscal 2010, given that we are forecasting operating income growth of 14 percent, we would expect an increase,” said Bellini, who advises buying the shares. Bellini also cautioned that any change to the tax rate on dividends may dissuade Microsoft from lifting it “materially.”

Microsoft will probably say fourth-quarter earnings per share rose to 46 cents, the average of analysts’ estimates compiled by Bloomberg, from 34 cents a year earlier. Analysts predict revenue will rise 16 percent to $15.3 billion.

PC Demand

The gains were fueled in part by rising demand for personal computers. Global PC sales rose 21 percent last quarter, according to Gartner Inc. outpacing the research firm’s forecast for a 19 percent climb. Intel Corp., the world’s biggest chipmaker, said last week that corporate spending is increasing.

Some technology companies have been turning away from large acquisitions, instead accumulating cash, which they may use for dividends and share buybacks, according to Bloomberg analysis. With International Business Machines Corp. and Analog Devices Inc. already boosting payouts this year, there’s increased pressure on other technology firms.

Over the past decade, Microsoft, with one of the biggest cash piles among non-banking companies, has experimented with strategies to return funds to shareholders.

Payout History

Microsoft declared its first dividend in 2003, when it had more than $43 billion in the bank. Less than two years later with cash mounting, the company paid a special one-time dividend of $3 a share.

Microsoft rose 69 cents, or 2.8 percent, to $25.81 at 12:34 p.m. New York time in Nasdaq Stock Market trading. The shares had lost 18 percent this year before today.

In 2006, when investors urged the company to repurchase at least $60 billion of stock, Microsoft tried a $20 billion tender offer for its own shares. The offer failed to generate enough interest and investors tendered just $3.8 billion in stock.

Microsoft is now in the middle of a $40 billion repurchase program that runs through 2013. The company stopped repurchases for three quarters during the economic slump to conserve cash.

Since the recession ended, many investors have shown a preference for using the cash for payouts rather than buybacks, Holland said. There isn’t much evidence that repurchases raise the stock price, especially with regard to Microsoft, he said. The stock trades in the same range as it did five years ago.

Still, a dividend increase may do little to assuage investors seeking new areas of growth now that Microsoft’s Windows 7 operating system is out the door. Some shareholders are concerned about the company’s declining market share in mobile phones and Apple Inc.’s ascent in tablet-style computers, said Tony Ursillo, an analyst at Loomis, Sayles & Co. in Boston.

That may pose a threat to notebooks running Windows, said Ursillo, whose firm owns Microsoft shares.

“People cared about Windows 7,” he said. “They don’t seem to care about anything else that may be going well for the company.”

Thursday, July 22, 2010

Facebook will try to get a New York man's claim for majority ownership of the website thrown out of court, attorneys for the social networking site said Tuesday.

A complaint by Paul Ceglia of Wellsville claims that a 7-year-old contract he signed with Facebook founder Mark Zuckerberg for software development entitles him to 84 percent of the company.

"No one's ever said it's not his signature or it's a fake contract," Ceglia attorney Terrence Connors said during a federal court hearing in Buffalo.

Connors said the two men met when Zuckerberg, then a Harvard University freshman, responded to an ad Ceglia had posted on Craigslist looking for someone to develop software for a street-mapping database he was creating.

Zuckerberg offered to take on Ceglia's project for $1,000, Connors said, and then told Ceglia about a project of his own, a kind of online yearbook for Harvard students that he wanted to expand.

Ceglia said he gave Zuckerberg another $1,000 to continue work on Zuckerberg's "The Face Book," with the condition that Ceglia would own a 50 percent interest in the software and business if it expanded. The percentage grew to 84 percent based on a clause that added a percentage point for each day the project went past its Jan. 1, 2004, due date.

Zuckerberg's undertaking "at that time was a fledgling project," Connors said. "Who knew it would turn into what it has turned into today."

Facebook recently celebrated its 500 millionth user, Connors said.

At the center of Ceglia's claim is a two-page "work for hire" contract bearing the names of both men.

Facebook attorney Lisa Simpson acknowledged on Tuesday that Zuckerberg and Ceglia had worked together on the street-mapping website but said the contract submitted by Ceglia was full of "inconsistencies, undefined terms and things that don't make sense."

"We have serious questions about the authenticity of this contract," Simpson told U.S. District Judge Richard Arcara. "What the contract asserts is there is a relationship about Facebook and there isn't one."

Ceglia's complaint was filed in state Supreme Court in Allegany County on June 30 and transferred to federal court at Facebook's request. A state judge's temporary order restraining Facebook from transferring assets was frozen by the federal judge last week. Both sides agreed Tuesday to let it expire July 23.

The attorneys also agreed to come up with a filing schedule for the case by Aug. 6, after Ceglia's attorneys indicated they may file a newer version of their complaint and Facebook attorneys said they planned to file a motion to dismiss it altogether.

Ceglia was the subject of a temporary restraining order issued by New York Attorney General Andrew Cuomo in December 2009, after Cuomo said a wood-pellet fuel company operated by Ceglia and his wife took more than $200,000 from consumers and failed to deliver the pellets or refunds.

The case is pending.

A telephone listing for Allegany Pellets was not in service Tuesday.

In 2008, Palo Alto, Calif.-based Facebook settled a lawsuit over its origins brought by three of Zuckerberg's former Harvard classmates, who claimed he turned their idea into Facebook after they hired him to work on a website that later became ConnectU.

Wednesday, July 21, 2010

Behind the recovery in business spending is a surge in purchases of the computers that form the backbone of the Internet, as companies scramble to meet growing demand for video and other Web-based services.

The need to reach customers and employees over the Web is driving furious demand for server systems, the machines that power corporate computer rooms.

Many companies are stocking up on new Dell servers, which typically cost a few thousand dollars apiece, to replace older machines with more energy efficient models or systems with more powerful processors.

Also, an increasing number of businesses are turning to outsourcing companies, which manage computer rooms for customers and in many cases are sharply stepping up purchases of servers to keep up with rising demand.

International Business Machines Corp., one of the biggest vendors of servers, said Tuesday that sales of industry-standard servers and IT services jumped 30% in the second quarter, after rising 36% in the first quarter.

The buying activity became apparent last week, when Intel Corp. said quarterly revenue from its unit selling server chips rose 42% from a year earlier, while shipments driven by Internet-related companies' purchases nearly tripled.

Growth in Web traffic isn't a new phenomenon, but computer purchasing to keep up with demand is accelerating because of improving economic conditions and technology that makes purchases of new computers pay off more quickly.

On Thursday, Internet giant Google Inc. reported $476 million in capital spending, including spending on servers and other hardware. That was more than triple the amount it spent a year earlier.

Unlike Google, many companies are side-stepping the costs of building their own computer rooms, opting to place servers they buy in "co-location" centers that maintain machines and offer Internet connections.

Rackspace Hosting Inc., a San Antonio, Texas, company that runs data centers, says it added 9,152 servers in 2009, plus about 3,000 more in the first quarter of this year. Savvis Inc., a competitor based in Town and Country, Mo., says it has purchased more than 80% more servers over the last 12 months.

"All I see all day is trucks coming up to our loading docks dropping off servers," says George Slessman, chief executive of i/o Data Centers LLC, a Phoenix-based company. He says the number of customers that have installed servers in its computer rooms has risen from 140 at the beginning of 2009 to nearly 400 now.

The market research firm IDC puts spending on cloud-computing, a term that includes delivering computing capacity over the Internet, at $16.5 billion in 2009, and projects spending in the field will increase 27% a year through 2014—with the number of servers deployed in cloud applications expected to triple to 1.35 million over that period.

Forrest Norrod, Dell's vice president and general manager of server platforms, says the company has seen "triple-digit increases" in its cloud-related business year over year. "The cloud side is growing faster than the rest" of the server market, Mr. Norrod says.

There are several reasons. Companies keep stepping up the use of the Web to reach customers and adding features like video streams that require more computing power and faster network connections.

Such operations generate huge volumes of data, which have forced companies to buy more-powerful servers to help analyze the information, says Mike Long, chief executive of Arrow Electronics Inc., which sells servers and distributes chips and other components.

Meanwhile, companies that stocked up on servers over the past decade have struggled to find space, electrical power, colocation in Maryland, and labor to keep them running. Technology suppliers like Intel and rival Advanced Micro Devices Inc. have reacted by designing chips that offer lower power consumption as well as greater performance. They argue that switching to new servers with such chips can save enough on power and labor costs to pay for upgrades in a few months.

Intel, for example, has overhauled its Xeon line of servers chips to include a model with the equivalent of eight electronic brains on one piece of silicon. The company estimates that a server with four such chips offers a 20-fold performance increase over an existing server with four single-processor chips; that means one new machine can take the place of 20.

Even before factoring in models based on Intel's newest Xeon chips, pricing for some server vendors is on the rise; the average price of Xeon-based servers sold by Hewlett-Packard Co., for example, rose nearly 12% to $3,993 from the second quarter of 2009 to the first quarter of 2010, market researcher Gartner estimates.

Customers have responded, in many cases paying up for servers with high-end chips that command higher prices. Mr. Erwin of ThePlanet says it moved swiftly this year to Intel's new technology, saving his company money on power and labor costs and providing greater performance to offer customers at a higher price.

Other companies are adding different systems for different computing chores. Susan Shimamura, the vice president of operations at IAC/InterActiveCorp's Ask.com, says the company has traditionally bought only low-end Dell server systems for its Web search function. While continuing that practice, it recently decided to also buy higher-end machines for databases that analyze how people use Ask, she says.

Big-name server makers are not the only beneficiaries. To offer cloud-style services, Rackspace prefers little-known suppliers for attractively priced "white-label" servers "straight from the factory in Taiwan," says Lanham Napier, its chief executive.

Just how long the server-buying boom will last is unclear, amid economic jitters and the fact that cloud companies tend to buy servers in advance signing up customers.

But companies pursuing cloud computing say demand is so strong that they aren't worried about adding too much capacity. "This is a major tectonic movement," says Manuel D. Medina, chief executive of Terremark Worldwide Inc., which says its cloud business has been growing 30% sequentially each quarter. "There's zero chance of a bubble."

Tuesday, July 20, 2010

Yahoo's David Ko says mobile ads, apps and partnerships are the best way to increase its mobile business.

Yahoo has long shied away from creating its own cellphones and mobile operating system, even as rivals like Google and Microsoft dove in. Last week, at least, that decision looked wise. On June 30 Microsoft revealed it would stop producing its line of "Kin" cellphones, launched with much fanfare just a few weeks ago. On July 1, Google Chief Executive Eric Schmidt said the search giant would not release any more Google-designed Nexus phones, and T-Mobile USA said it would halt distribution of its once-popular Sidekick phones. Analysts attributed all these decisions to disappointing sales in the face of fierce competition.

David Ko, a Yahoo senior vice president who oversees its audience, mobile and local businesses for North and Latin America, says the company continues to believe advertising campaigns, applications and partnerships are the best way to increase its mobile business. Rather than compete with companies like Nokia and Samsung, Yahoo collaborates with them, in part to gain access to their hundreds of millions of users. Even Google could be considered a mobile partner with the recent release of several Yahoo applications for Google Android phones.

Forbestalked to Ko about his strategy, Yahoo Chief Executive Carol Bartz's take on the wireless industry and why Yahoo has no plans to buy a mobile ad network.
Forbes: You oversee Yahoo's mobile business as well as its audience properties. How are you tying mobile and media together?

Ko: We had treated mobile as a vertical [business] across the company for a very long time, but it needs to be a true horizontal. It shouldn't be one group thinking about how to mobilize the company, but everyone. Users are no longer logging onto their PCs or laptops for content; they're getting it on netbooks, iPads and cellphones. We have Yahoo Finance and Fantasy Sports on the iPhone and BlackBerry. We're taking our core media properties and pushing them out across these platforms.
On July 1 Yahoo released a slew of mobile applications, including Mail and Messenger applications for Google Android phones. What's the strategy there?

We want to make it really easy for users to access our services wherever, whenever, however. We've been focused primarily on iPhone and BlackBerry, but people are searching for Yahoo on Android. I recognize we may be a little late to Android, but we wanted to have something with increased functionality, not just a "me too" app that we had on other partners one to two years ago. The Android apps let you view and download attachments, get push e-mail and toggle between Mail and Messenger, among other things. Mail and Messenger are core parts of our communications suite that can link out to other areas, and are where the bulk of our users are today. As we start to integrate more of our content, you will see more apps pop up.

Now that Yahoo is on Android, what other mobile platforms are you thinking of adding?

We've partnered with a number of carriers and manufacturers, and most manufacturers are tied to specific platforms. In May we signed a worldwide agreement with Nokia to be the exclusive provider of Ovi Mail and Chat services on its phones. Before that we made an announcement with Samsung to distribute our communications services and content across phones that run [Samsung's own operating system] Bada and Android. The Bada stuff is still to come, and a lot of the Nokia integration too.

So, Yahoo's mobile strategy is to continue forging these partnerships rather than make its own phone or operating system, like Google and Microsoft have done?

Right. We've been very clear in our talks with people in the mobile ecosystem that we're not looking to build our own mobile platform or a version of Android or a phone to compete with manufacturers or platform providers. That means we're not conflicted in the ways, potentially, that other partners may be. My group's mission is to deliver high-quality content and services. We've worked with Samsung and Nokia for many years, but are integrating more deeply with them because we're a trusted partner.

Google talks a lot about how it thinks about "mobile first" now. Is Yahoo placing the same importance on mobile?

[Chief executive] Carol [Bartz] is pushing us to think about mobile across the company. At our analyst day [in May], she talked about what she called the "four o's": mobile, local, social and video. She believes all of these should be horizontals, meaning things a company does in the normal course of business. So if there's a new property you want to build, you have to ask yourself how it will render on a mobile device.

Carol Bartz is known for being frank and decisive. How has she affected Yahoo's mobile business and the way you run your team?

She's definitely pushed us to think holistically, figure out ways to simplify different processes and get things done quicker. At times people have been hesitant, but she is very clear: if something doesn't work, move on, work faster to get to the next thing. Don't sit and point fingers. We want to be about innovation and speed to market.

I recently had my 10-year anniversary at Yahoo, and there was a roast. Carol came in and said some kind words and even took a good whack at a piñata that looked like me. She can give a lot of advice on how to run your business and also be really personal with the team. She's not afraid to roll up her sleeves--in this case, literally.
You just returned from a trip to Sao Paulo, Brazil. What is Yahoo planning for the Latin American mobile market?

Latin America has long been a Yahoo territory. We have a large team down there, and we're one of the leading portals. But it's sort of new to me. I went there about two weeks ago. We talked a lot about what we could leverage in Latin America and vice versa, in terms of different devices and things we're doing on the media side. We identified dozens of things. In the U.S., for instance, we could probably make a deeper push engaging the Hispanic community. We want our services to have a very local feel.

Earlier this year it seemed likely that Yahoo would buy its own mobile ad network, but so far you haven't followed Google and Apple in that direction.

Google and Apple are monetizing other people's inventory. We're monetizing our own inventory. They're fundamentally two different businesses. Six hundred million consumers come to Yahoo! on a monthly basis worldwide. In the U.S. alone, we have 45 million users on mobile, making us a leading mobile Web brand. That's enough users for us to monetize our own stuff first, which is what we've been working on.

What's your outlook for the mobile ad industry this year and next?

At Yahoo we used to try to push mobile. Now big agencies are saying, "Where are your mobile ads?" That's one of the biggest shifts in the industry today. The market should continue to grow exponentially. As network speeds get faster and phones get easier to use, advertisers can be more creative and better link things between PC and mobile. Mobile has been growing in healthy percentages every year, but that's always been from a smaller base compared to the PC.

Part of Yahoo's monetization strategy appears to be working with HTML5 to create more interesting mobile ads.

We are using HTML5 to show different things around ads. It's a really good first use case and template. Most ads on devices are in a box-type format, but HTML5 has allowed us to be more creative. We did a mobile SEO campaign for Shrek Forever After that had a pop-up element. It was playful, but also functional and not obtrusive; it won't kick you out of the app. Other browsers will have the ability to do similar things. You can see how this could be expanded to other devices and platforms.

Location data is going to be a key feature of anything on the mobile Web. What is Yahoo doing to be relevant in local search?

Local is important for us. In the context of the PC we have launched locally relevant content in places like Detroit and Cleveland with the help of [Web content company] Associated Content [which Yahoo acquired in May]. That started out on the PC first, but stay tuned to where we may want to take that on mobile.

We have an iPhone app called Sketch-a-Search that lets you search for nearby restaurants by drawing an area on a map with your finger. Right now it just finds restaurants, but we will expand it, possibly to include ATMs and gas stations. It's a fun way to play with local within search.

What are Yahoo's plans for the iPad? You were early to release an iPad app.

We are very, very close partners with Apple and want to make sure we're creating engaging apps for them. Our Yahoo Entertainment iPad app has been downloaded hundreds of thousands of times. You should be seeing other Yahoo SEO apps that utilize that form factor.

Microsoft slowly but surely starting to eat into Google's dominant position in U.S. search market.

Microsoft continues to make gains in the U.S. Internet search market as its overall share jumped 7% in June compared to the previous month.

While the software maker's gains are coming mostly at the expense of partner Yahoo, whose search operations it will soon absorb, new data shows that Bing search engine marketing is also chipping away at Google's dominant position.
Bing captured 9.85% of all U.S. searches in June, up from 9.23% in May, according to data released Thursday by Experian Hitwise. Yahoo's share held roughly steady at 14.37%, while Google's market share fell 1% month-to-month, from 72.17% to 71.65%.

Bing's short-term climb is impressive, but a longer view shows Microsoft's upstart search engine making even bigger inroads against its main rival.

Microsoft launched Bing in June of 2009, when it captured 5.25% of the U.S. market. With its share currently at 9.85%, Bing has grown 88% in just 12 months. Yahoo's share has declined 11.24% over the same period, while Google is down 3.2% over that span.

While those numbers might not strike fear into Google, the trend should evoke at least some concern from the search leader. Microsoft, after all, will likely become a more formidable competitor later this year or early next when its partnership with Yahoo fully takes effect. Under the deal, Bing will become the default search engine on Yahoo's Web properties. In exchange, Microsoft will share revenue generated by those searches with Yahoo.

Bing, according to Microsoft, is designed to deliver a more functional experience than existing search engines, including Google's.

That is, queries entered into Bing yield not only information related to the search term, but also links to sites where users can make immediate purchases or engage in other activities related to their queries. For instance, a search on Bing for, say, flights to Hawaii, coughs up real-time pricing and seat availability, and lets users make a booking then and there.

Microsoft's gains show that Google search marketing, for its part, must continue to innovate if it's to maintain its healthy lead in search.

Monday, July 19, 2010

Google Inc.'s (GOOG) intention to buy ITA Software Inc. for $700 million, announced Thursday, could put the company in control of widely used technology that, among other things, helps power a key aspect of Microsoft Corp.'s (MSFT) rival search engine.

Google said in a statement that ITA Software's technology "opens exciting possibilities for us to create new way for users to more easily find flight information online."

Among other clients, Microsoft uses ITA Software's technology to include airfare pricing and availability information in Bing, according to ITA Software's Web site.

Bing is a search engine unveiled amid a great deal of fanfare last year. Microsoft has touted Bing's ability to provide accurate, up-to-date information on airfares as an important aspect that helps distinguish the search engine from competitors, including Google.

As the dominant force in Internet search and advertising, Google has attracted a great deal of scrutiny from federal antitrust regulators. The company's $750 million purchase of mobile-phone advertising firm AdMob Inc., for example, was delayed for several months by regulatory review before it closed in May.

Google Chief Executive Eric Schmidt said during a conference call held Thursday that he expects "significant" regulatory review of the ITA Software acquisition.

According to recent data from comScore Inc., Google held a 63.7% share of the U.S. Internet search market in May, compared with an 18.3% share for Yahoo Inc. (YHOO), and a 12.1% share for Microsoft.

Microsoft has invested heavily in its pursuit of Google in the search market. The company's unveiling of Bing last year has been followed by extensive advertising, encouraging Internet users to shift away from Google and try something that Microsoft promotes as better able to provide specific, tailored information.

ITA Software pulled in a massive, $100 million round of funding in 2006, from investors including venture capital firm Sequoia Capital.

The deal announced Thursday would therefore mark another acquisition by Google of a company backed by Sequoia, one of Google's own original investors.

Other Sequoia-backed firms bought by Google include AdMob and YouTube, which Google acquired in 2006.

Google Inc. on Friday said it bought Metaweb, an Internet information database start-up, in order to improve its core Internet-search business.

In a post on the company's blog, Google said Metaweb had a free and open database of 12 million "things" such as movies and locations that could help Google's user get quick answers to difficult search queries.

The deal's terms weren't disclosed.

Google handles the majority of Internet users' search queries but is facing competition from Microsoft Corp.'s Bing search engine, which research reports say handles more than 10% of queries. Later this year Bing will power searches on Yahoo Inc.'s websites.

Google is in the midst of a buying spree and earlier this month announced a $700 million acquisition of ITA Software, whose software powers many of the Internet's most popular travel search and booking websites, such as Kayak.com and Orbitz.com, as well as Bing's travel search feature.

Wednesday, July 07, 2010

The new search indexing system is faster and provides 50% fresher results, according to Google.

Google has switched to a new search indexing system that the company claims is faster than the previous technology and provides 50% fresher results.

Google announced last August that it was overhauling its search technology. Dubbed "Caffeine," the new architecture was introduced a month after Microsoft upped the ante in the search war by extending its new Bing search engine to all of Yahoo's Web properties. The Yahoo Web portal is the number two player in search.

Google said Wednesday it built Caffeine to bring users more up-to-date, relevant search results from the fast-growing Web.

To better understand how Caffeine works, a person must first know that Google doesn't search the entire Web to answer user queries, but rather its index of the Web. The quality of results depends on how well a search engine can keep its index up-to-date.

Under the old system, Google would crawl the entire Web to update large batches of Web pages in its index. Updates of individual pages in a batch could not be made available until the entire batch was updated, which meant there was a significant delay between when Google found or updated a page and made it available to the user.

With Caffeine, Google crawls the Web in smaller portions and updates its index on a continuous basis.

"As we find new pages, or new information on existing pages, we can add these straight to the index," Google engineer Carrie Grimes said in the company's blog.

Caffeine analyzes hundreds of thousands of Web pages each second in parallel and adds new information to the index at a rate of hundreds of thousands of gigabytes per day, according to Google. Caffeine takes up nearly 100 million GB of storage in one database.

"You would need 625,000 of the largest iPods to store that much information; if these were stacked end-to-end they would go for more than 40 miles," Grimes said.

Early testers of Caffeine gave the search platform rave reviews shortly after the new system was first introduced. Testers said it yielded more results with better accuracy than the existing technology.

Google remains the dominant search engine, accounting for 71.4% of Web searches in May, according to Experian Hitwise. Yahoo is a distant second with a 14.96%, followed by Bing, 9.43%.

However, Microsoft in May made significant strides in four major categories, a reflection of the company's focus on vertical markets. The number of searches on Bing related to automotive, health, shopping, and travel soared by 95%, 105%, 100%, and 71%, respectively, compared to the same month a year ago, Hitwise said.

In March, Microsoft announced that it would release a number of enhancements to Bing. Most notably, Microsoft improved Bing's Quick Tabs feature, which delivers results based on what the search engine believes is the intent of the user's query.

Friday, July 02, 2010

Microsoft has added a new "Entertainment" section to Bing which features TV shows, music, and movies. Games can be played right on Bing, TV shows can viewed right on Bing, and songs can be streamed right from Bing.

It's a good idea, but the execution of Entertainment leaves us underwhelmed. We searched for "Friday Night Lights" on both Google and Bing. For some reason Bing gave us "News" first, then a gaggle of thumbnails for episodes, then other information.

Google, on the other hand, had a nice fat sponsored link to Friday Night Lights on Hulu at the top. Then it had NBC.com/Fridaynightlights. If we wanted to watch the show or learn about it, it couldn't be more simple or clean.

While we're not crazy about the execution, but we wouldn't be surprised to see Google adopt some of the Bing Entertainment styling in the near future. Everytime Bing introduces a cool new feature, Google is quick to adopt it for itself.